‘Greece never received offer to make public debt sustainable’

Greece has been negotiating with its creditors for months, but it has never received a clear offer to reconstruct and make the public debt sustainable, says Costas Mavrides, MEP from the Democratic Party in Cyprus.

Greece has made an official request for a three-year bailout
program from the European Stability Mechanism (ESM). No amount
was mentioned but Athens does promise to immediately implement
tax and pensions related measures.

RT:Greece has filed the paperwork for a
third bailout. Who do you think will make the bigger concessions
to keep the country in the euro - Athens or the creditors?

Costas Mavrides: I hope it’s going to be both
sides. Actually that was my own initiative and my own pressure on
both sides even [on Wednesday] during my intervention during the
plenary session when the PM of Greece, Mr. Tsipras, as well as
Mr. Juncker was there. My understanding is that mistakes have
been made not only on the part of decades of corruption in Greece
and misallocation of resources. But that’s the past. What we have
now in front of us is that we have a new government with a fresh
referendum and the result is very clear – the Greek people do not
accept the demands of the creditors. The other new element, which
basically indicates the position of the Greek government, is the
fact that the IMF - traditionally not friendly to Greece
organization - has basically made the case that the public debt
of Greece is not sustainable. I’m asking everyone “Is there any
leader who would accept for his own country an agreement without
a sustainable debt?” Given those two arguments or elements I
think Greece can make a case for an agreement, but at the same
time, there are steps Greece has to make. I strongly believe that
if PM Alexis Tsipras wants to remain in the eurozone, and that’s
basically our goal as well as in the socialist and democratic
political alliance here, then he has to come with some more
concrete proposals and doing that he will have a lot of support,
much more than has been shown [on Wednesday] at the plenary.

RT:Mr. Tsipras met with quite a few boos
and one of your German MEP colleagues said that “debt cut won’t
hurt financial institutions and bankers, it’s going to be paid
for by Spain and Portugal, it’s going to hit the nurses in
Poland…” How fair is it that other countries suffering through
austerity will be the ones footing the bill?

CM: To use the wording of Mr. Juncker, the
President of the Commission, just [on Tuesday] he made the point
that sometimes simple answers are not right and I think it
applies to that case as well. [Such statements] is a political
game, the surface might seem right although things are more
complicated than that, and I will give and an argument for that.
When a member state decides to submit itself in the eurozone, in
essence that member state has given up a vital right which is the
right to issue money… If we look at the case of the US, for
example, a state there doesn’t have the right to issue money but
at the same time it has automatically all the protection and
support of the central government. We don’t have that in the
eurozone, but at the same time we ask for solidarity. But what is
solidarity in essence? Solidarity would be to provide help for
Greece given that the issue now is not just an economic crisis,
it’s a humanitarian issue and if we put more measures we are
feeding the crisis more towards a vicious cycle. I understand the
arguments of other member states, but at the same time we have to
see the whole picture and not just simplify things in order to
make our political point clear and to score points. We cannot say
“we want a united Europe” and at the same time use divisive
language. It’s as simple as this to me.

RT:If Greece does get part of its debt
written off, won't other countries want the same treatment?

CM: I do understand that there is a point there
that Greece has failed all the time and we do recognize that, but
at the same time what is at stake it is not just Greece it’s
whether we as Europeans we want to share the wealth, we want to
see sustainable growth and I will give you an example of this.
All these months, the last six months, we had intensive
negotiations, but there was never a clear offer to Greece to
reconstruct and make the public debt sustainable. Would anyone
accept such an agreement without a sustainable debt for his own
member state? Again, I understand that we have to balance the
interests of different member states, but to say that a nurse or
a clerk in Portugal would pay for the debts of Greece, I think
that’s misleading and that’s oversimplification.

‘Much smaller eurozone than today in 10 years’

There is an increasing dichotomy of view today in Europe with
Germans, Finns and Dutch exasperated with the Greek leadership
and the French, Italians bending over backwards to keep Greece in
the EU, says Keith Boyfield, economist and research fellow for
the Centre for Policy Studies.

RT:We understand that debt relief remains
part of the Greece plan. But the creditors have ruled that out
before. Does Athens have any chance of getting some leeway on the
amount of debt it's got to pay back?

Keith Boyfield: If you think about it in
Ireland, Spain and Portugal people have been making huge
sacrifices, so the question is why should the Greeks be given
such special treatment and I think that you are beginning to see
many political leaders getting increasingly exasperated with the
Greek leadership and they might actually finally call it a day
this weekend.

RT:EU governments maintain that a 'Grexit'
is not an option for them. But on Tuesday the European Commission
President Jean-Claude Juncker said “We have prepared a Grexit
scenario in detail...” So which is it to be for them, do you
think? Get a deal or cut Greece loose?

KB: They don’t want it to happen but they are
not prepared to pay the club dues and I just can’t see how the
public in Greece are going to be prepared to live with the
austerity measures and the increases in tax. A lot of them
basically are going to deter the tourist traffic which Greece
depends on so much. We are heading for a big disaster if we kick
the tin down the road a little further.

KB: It can be part of the EU, but I think what
we are increasingly seeing is a dichotomy of view. The Germans,
the Finns and the Dutch are getting increasingly exasperated with
the Greek leadership, but the French and Italians are bending
over backwards to try and keep Greece in the EU and the French I
notice have been talking to the US to try and provide diplomatic
support for the Greeks to stay in Europe.

RT:Why are French and Italians staying in
beyond the Greek side?

KB: Because I think what they all fear,
particularly the north class in France, that if Greece leaves the
euro you might see next time we have a financial crisis in Spain,
Portugal or Italy. There will be tremendous pressure on those
countries, the Club Med countries, to leave. I wouldn’t be
surprised that if in ten years’ time we see a much smaller euro
area than we do have today.

RT:What about Germany then?

KB: I’m beginning to feel that the general
public and the political support of Mrs. Merkel in Germany are
just fed up of the Greeks basically, and in Greece the public is
just fed up of living within the austerity and the austerity
demands of being within the euro. So quite a few of them I think
would rather leave.

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